Advanced Micro Devices (NASDAQ:AMD) surged 8.8% due to compounding excitement from last week’s “Advancing AI” event, along with a broader surge in chip stocks.

There have also been analyst upgrades here as investors are starting to see more potential for this company, especially as many AI companies start focusing more on cost efficiency and diversification. AMD stock seems to have bottomed out at the moment and is starting another rally from cyclical lows.

What’s Driving the Surge for AMD Stock
CEO Lisa Su recently unveiled the Instinct MI350 series for 2025 and teased MI400 chips that will compete with Nvidia’s Blackwell GPUs. On top of that, AMD introduced Helios. This is an open, rack-scale AI system that stitches its GPUs, CPUs, networking, and ROCm software into a turnkey platform.

Plus, it has received endorsements from many big AI partners, like OpenAI, Meta, xAI, Oracle, and Microsoft. Many of these companies are looking for a genuine Nvidia alternative for diversification.

It’ll be a win-win for both AMD and its customers, since Nvidia’s chips are often being sold with triple-digit margins due to the AI chip shortage persisting.

Should You Buy AMD Stock Now?
AMD stock is definitely a solid buy at the moment. Both the technicals and the fundamentals seem to be in favor of more bullish price action in the coming months. AMD is finally starting to roll out products that can be considered competitive, and the most recent comeback could help it reach a new peak if it can start markedly outperforming expectations and up its guidance.

The consensus price target of $129.93 implies 2.9% upside potential at the moment, but the highest price target of $200 is what I’m looking at if this bullish chip cycle holds.

— Omor IE

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Source: Money Morning